Bartlett & Denny (No 3)
[2022] FedCFamC2F 1471
•1 November 2022
Federal Circuit and Family Court of Australia
(DIVISION 2)
Bartlett & Denny (No 3) [2022] FedCFamC2F 1471
File number(s): PAC 5587 of 2017 Judgment of: JUDGE NEWBRUN Date of judgment: 1 November 2022 Catchwords: FAMILY LAW – Parenting - costs application by Mother relating to Father’s previously dismissed costs application -costs Order made Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Bartlett & Denny (No 2) [2022] FedCFamC2F 682
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) 54 Fam LR 1
Division: Division 2 Family Law Number of paragraphs: 24 Date of hearing: 19 October 2022 Place: Parramatta Solicitor for the Applicant: Mr Penhall Solicitor for the Respondent: Mr Youssef ORDERS
PAC 5587 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS DENNY
Applicant
AND: MR BARTLETT
Respondent
order made by:
JUDGE NEWBRUN
DATE OF ORDER:
1 November 2022
THE COURT ORDERS THAT:
1.The Father pay the Mother’s costs in defending the Father’s unsuccessful Application in a Proceeding filed 23 December 2021, assessed on a party-party basis, with such costs to be agreed or assessed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Denny & Bartlett (No 3) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
Introduction AND BACKGROUND
This is the determination of the Mother’s application for costs against the Father in relation to defending the Father’s unsuccessful Application in a Proceeding filed 23 December 2021 in which the Father had sought costs against the Mother in relation to the completed final parenting proceedings.
The Mother seeks the following costs order against the Father, which is opposed by the Father:
The Father pay the Mother’s costs of defending the Father’s Application in a Proceeding filed 23 December 2021 on an ordinary basis up to 3 March 2022 and on an indemnity basis thereafter, with such costs to be agreed or assessed.
In relation to the above application of the Mother, the Court refers to the material relied upon by the parties at this further costs hearing which it has considered and being:
(a)The Mother: Affidavit of the Mother’s solicitor, Mr Penhall, filed 24 August 2022;
(b)The Father: Affidavit of the Father filed 10 October 2022.
In relation to the above application of the Mother, the Court refers to its Orders and related Reasons for Judgment in relation to the completed final parenting proceedings dated 25 November 2021. The Court also refers to its Orders and related Reasons for Judgment dated 26 May 2022 relating to the Father’s above unsuccessful application for costs.
RELEVANT LEGAL PRINCIPLES
The Court refers to section 117 of the Family Law Act 1975 (Cth) (“the Act”) in relation to the Mother’s costs Application.
Under subsection (1) of section 117, each party to the proceedings bears his or her own costs subject to, inter alia, subsection (2) of section 117. The Court refers to subsection (2) and subsection (2A) of section 117.
Section 117 (2) provides:
If, in proceedings under this Act, the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.
Subsection (2A) of section 117 of the Act states:
(2A) In considering what order (if any) should be made under subsection (2), the Court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the Court considers relevant.
Relevant matters under subsection (2A) will now be considered.
(a) The financial circumstances of each of the parties to the proceedings
The Court, in its Reasons for Judgement relating to the Father’s unsuccessful costs application had stated under this subheading:
11 Both parties are in full-time employment.
12The Mother works as a team leader at Centrelink. The Mother’s after-tax weekly income is about $1,405. Her 2021 taxation notice of assessment states she has a taxable income of $94,105.
13The Mother states that she has an unpaid account of her solicitors, Penhall & Co, in the sum of almost $83,000. She states that she does not have the money to fund further parenting proceedings whilst stating that there are outstanding property proceedings between the parties.
14The Father’s Financial Statement filed 18 February 2020 revealed weekly salary before tax as an audiologist of $2,770 and weekly rental before tax from the [P Street] property in the sum of $365.
15The Father states that he estimates the net value of the parties’ [Q Street] property as being about $970,000, and the net value of the parties’ [P Street] property as being about $535,000. These properties are jointly owned by the parties.
16The Father states that in October 2021 he took out a new personal loan with Westpac in the sum of $35,000 to pay legal fees. He states he also obtained approval for a second loan in the sum of $40,000 with [Company R] in November 2021 to also help fund his legal fees. He states that his total legal costs of about $123,000 have already been paid by him.
17The Mother occupies the [Q Street] property with the children. The parties’ property proceedings are yet to be determined. Their proposed property adjustment Orders sought differ; the Father seeks, inter alia, an Order that the above property be transferred to the Mother but with the Mother to refinance the mortgage loan and pay $125,000, whereas the Mother seeks, inter alia, an Order that the above property be transferred to her with herself to refinance the mortgage loan. The Mother is the primary carer of the children, spending 9 nights in every fortnight during school term times with them, compared to the Father’s 5 nights in every fortnight.
In the Father’s Affidavit filed 10 October 2022, he states that the above personal loan with Westpac now has a sum owing of about $31,400, and the above loan with Company R now has a sum owing of about $37,000.
The Father does not expressly contend that by reason of his current financial circumstances he would be quite unable to meet any costs order, whether by instalments or otherwise, that might be ordered by the Court. In any event, even if this Court found that the Father was not able to meet an order for costs, and it does not so find, there is clear Full Court authority that impecuniosity is not a bar to a costs order being made, in particular whether there are circumstances which otherwise justify an order for costs: see Medlon & Medlon (No. 6) (Indemnity Costs) (2015) 54 Fam LR 1 at paragraph 23.
(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party
Neither party is in receipt of a grant of legal aid.
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters
Contrary to the submissions of the Father, it was quite reasonable for the Mother to have defended the Father’s application for costs. The Father was seeking a fixed costs order against her in the sum of $80,000, and having adduced a significant amount of documentary material, including his affidavit of 45 pages and 8 annexures.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
Not applicable.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
Again, the Father was unsuccessful in relation to his above Application in a Proceeding filed 23 December 2021 seeking costs against the Mother in the fixed sum of $80,000 in relation to the parenting proceedings; on 26 May 2022 that Application in a Proceeding was dismissed.
(f) Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer
The Mother relies upon the following offers of settlement to the Father relating to the Father’s above Application in a Proceeding filed 23 December 2021.
The Mother relies upon:
(a)Her solicitor’s letter dated 15 December 2021 in which, inter alia, a counter offer was made to the Father as follows: “That with respect to the defendant parenting proceedings, there be no Order as to costs.” After that counter offer was made, the following paragraph appeared:
This offer will remain available for acceptance for a period of 14 days after which it is deemed to be withdrawn. If the Applicant fails in his costs application we will rely on this letter in support of the Wife’s application that the husband bear the costs of such application.
(b)Her solicitor’s letter dated 3 March 2022 in which, inter alia, the following was stated:
We are instructed to offer settlement of your client’s Application in a Proceeding filed 20 January 2022 on the following basis:
1. That the applicant withdraws his Application.
2. That there be no order as to costs with the intention that each party pay their own costs of the Application.
This offer will remain available for acceptance until 3pm on 7 March 2022.
The Mother’s solicitor wrote a letter dated 1 June 2022 to the Father’s solicitor stating, inter alia:
On 3 March 2022, our client made a Calderbank offer (copy attached). At that time our client's costs incurred in relation to the application and negotiations prior to your filing same amounted to $6,721.00 incl. GST. It is submitted that this was a commercial compromise which was not accepted by your client.
Assuming the Court's acceptance of the above position, indemnity costs would normally apply from and after a failure to accept the offer in accordance with Colgate Palmolive Co v Cussons Pty Ltd [1993] 46 FCR 225 at 233–4. Costs prior to the offer would normally “follow the event” and be allowed on an ordinary basis.
It can be seen from the above letters that the Mother’s side gave the Father ample opportunity to reflect upon his application for costs and to withdraw it, with each side bearing their own costs. The Father persisted with and prosecuted his application for costs.
g) Such other matters as the Court considers relevant
The Father’s unsuccessful Application in a Proceeding filed 23 December 2021, in which the Father sought costs against the Mother in relation to the parenting proceedings in the fixed sum of $80,000 required the Court to make a determination having regard to a significant body of detailed documentary material, including a lengthy Affidavit of the Father filed 11 February 2022, his counsel’s Case Outline and written submissions; in this regard, the Court refers to its Reasons for Judgment delivered on 26 May 2022. It was reasonable for the Mother to, inter alia, respond with her own material (again the Court refers to its Reasons for Judgment delivered on 26 May 2022) with a view to meeting the contentions of the Father relating to costs of the parenting proceedings. The Father’s unsuccessful Application in a Proceeding filed 23 December 2021 seeking costs against the Mother did not merely involve brief oral submissions made by each party immediately after the delivery of judgment following a final parenting hearing; rather it involved, again, the Court making a determination having regard to a significant body of detailed documentary material and in relation to which it was reasonable for the Mother to defend and address.
The Mother has incurred significant costs in defending the Father’s failed application for costs.
Taking into account all the above discussed matters, under section 117(2A) of the Act, it will be just that the Father pay the Mother’s costs in defending the Father’s unsuccessful Application in a Proceeding filed 23 December 2021 on a party-party basis, such costs to be agreed or assessed.
It will not be just that the Father pay costs on an indemnity basis after 3 March 2022. The Court has not overlooked the Father’s failure to accept the Mother’s above letters of offer relating to the Father withdrawing his Application for costs and the Mother’s solicitor’s reference to indemnity costs in one of those letters, however it is not bound to order indemnity costs in those circumstances; the Court has a discretion relating to indemnity costs which, in all the circumstances, it declines to exercise.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 1 November 2022
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